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Thursday, 17 September 2015

Indonesia lists world's biggest sukuk in Dubai

Indonesia listed on Sunday four sukuk valued at Dh22 billion - the largest ever carried out by a sovereign issuer on Nasdaq Dubai - as Dubai further reinforced its position as the world's leading hub for Islamic economy.

Indonesia's Finance Minister Bambang Bodjonegoro, who rang the market-opening bell to celebrate the listing of the Islamic bonds said it was an important step forward in further strengthening his country's ties with the UAE and the wider Middle East.

With the new listings, Dubai, which had already overtaken rival financial centres to become the world's leading sukuk hub in line with the goal set by the leadership, has boosted the listed nominal value of sukuk to Dh135 billion, with Nasdaq Dubai accounting for 93 per cent of that amount.

Sunday's sukuk listings are the largest ever carried out by a sovereign issuer in Dubai, underscoring the Emirate's growth as the global capital of the Islamic Economy.

Bodjonegoro said Indonesia, the biggest Muslim nation with a total population of 255 million people, is a frequent sukuk issuer in the global market. "Since our international debut in 2009, we have issued global sukuk valued at 7.65 billion dollars," he said.

The minister said the latest listings underlined importance of sukuk as a global sovereign financial tool for investment and development and strengthen confidence in Islamic finance regulatory environment in Dubai and the UAE.

Mohammed Abdulla Al Gergawi, the UAE Minister for Cabinet Affairs and Chairman of the Dubai Islamic Economy Development Centre, said the listing of the Indonesian sukuk was a milestone in the drive by Dubai to become the capital of the global Islamic economy.

Gergawi said Sunday's listing would play a significant role in attracting further sukuk from around the world and further strengthen global confidence in Dubai as the capital of the Islamic Economy. It will encourage more countries and corporations to utilise sukuk as a financial sovereign and investment tool in their development plans in the medium and long term.

Nasdaq Dubai attracted sukuk listings valued at $13.4 billion in 2014 and has added $12.6 billion so far in 2015.

By July, Dubai has overtaken other Islamic bond markets as the value of sukuk listed on the emirate's exchanges hit $36.7 billion, ahead of the world's three traditional sukuk centres: Malaysia, with $26.6 billion listed on Bursa Malaysia and the Labuan free trade zone, the Irish Stock Exchange with $25.7 billion, and the London Stock Exchange with $25.1 billion.

Leadership in global sukuk was a goal set by His Highness Shaikh Mohammed bin Rashid Al Maktum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in his 2013 initiative to make the emirate the capital of the Islamic economy.

While 56 per cent of Dubai's listed sukuk are from UAE issuers, 22 per cent are from Saudi Arabia. Ali said he wanted the proportion from the Gulf countries outside the UAE to grow.

The four sukuk listings by the Indonesian government under its Trust Certificate Issuance Programme comprise one issuance of $2 billion, two of $1.5 billion each, and one of $1 billion.

"The success of Dubai's Islamic capital markets is based on our deep-rooted traditions in this field and the profound knowledge of the many experts based within the Emirate. We are delighted to collaborate with issuers and other specialists around the globe to maintain the growth of the sector for the benefit of all participants," said Essa Kazim, Governor of DIFC, Secretary General of DIEDC and Chairman of DFM.

Abdul Wahed Al Fahim, Chairman of Nasdaq Dubai, said the exchange would further develop its close ties with international and regional investors, underpinning the global visibility of the sukuk issued by the government of Indonesia. "Nasdaq Dubai is positioned to support many more Islamic capital-raising activities by governments and public and private sector issuers around the world."

Hamed Ali, Chief Executive of Nasdaq Dubai, said Nasdaq Dubai is continually enhancing its swift and responsive listing process, as well as its comprehensive post-listing services. "We are committed to introducing further innovation and product development across the Islamic capital markets sector.